New logistics developments in KuwaitOctober 18, 2018
Filip Björklund, managing director of GAC Kuwait, talks to TOGY about the anticipated growth of Kuwait’s hydrocarbons industry, issues relating to large infrastructure projects and the company’s operations. GAC is a global integrated shipping, logistics and marine services provider that works with the hydrocarbons industry.
• On infrastructure: “There is certainly a lot of infrastructure development going on, with plans for more. With a young and growing population and the plans to diversify the economy away from dependency on oil, the infrastructure upgrades will be essential.”
• On the Boubyan Island development: “I think it will be a big improvement for Kuwait. Having an efficient port operation is key in the global trade-driven economy. Kuwait’s strategic location, coupled with an efficient and modern port, will make it a very interesting alternative to the other main ports in the region. The port may not be sufficient to turn Kuwait into a logistics hub, but it is definitely a key ingredient.”
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In what areas of Kuwait’s oil and gas industry do you see the most growth?
Most of the areas are economically feasible as the country has both the need and the financial strength to invest for the long term. Kuwait’s production target of 4 million bopd and its related plans to expand the upstream and midstream sectors are areas where we expect to see more investments.
The lower oil price over the last few years has driven everyone in the oil and gas industry to focus on efficiency, and this trend will continue even as the oil price has made a strong recovery in the past year. We have worked together with many of our customers to optimise their supply chains and lower their capex (capital expenditure). The demands are increasing, and we believe we are well positioned to meet them.
What are some challenges facing oil and gas companies in the Customs process?
Every country faces and enjoys different challenges and advantages. As a consumer, you want to feel assured that the products sold and used in the country are safe and that proper controls and tests have been applied and conducted, which may result in stricter procedures and processes being implemented in the country.
Red tape is a challenge in Kuwait and it becomes more pronounced when you bring in complicated cargo for the oil and gas industry. These companies are operating under uncertain conditions with tight deadlines.
Increased transparency in Customs requirements would facilitate these companies’ operations. Efficiency improvements, such as making it possible to complete certain procedures before the cargo’s arrival and automation for clearance and duty payments, could also smoothen the Customs process for importing companies. GAC Kuwait has extensive experience in Customs clearance and we have often helped our customers avoid delays and problems with our good planning, but it can still be challenging at times.
Have you seen a large push to improve Kuwaiti infrastructure?
There is certainly a lot of infrastructure development going on, with plans for more. With a young and growing population and the plans to diversify the economy away from dependency on oil, the infrastructure upgrades will be essential.
Do you think the development on Boubyan Island will advance the state of large-scale transport in Kuwait?
I think it will be a big improvement for Kuwait. Having an efficient port operation is key in the global trade-driven economy. Kuwait’s strategic location, coupled with an efficient and modern port, will make it a very interesting alternative to the other main ports in the region. The port may not be sufficient to turn Kuwait into a logistics hub, but it is definitely a key ingredient.
What makes Kuwait an attractive market for your company?
GAC was founded in Kuwait by Swedish entrepreneur Bengt Lindwall in 1956. Although since then, we have expanded and are now a global company with operations in more than 50 countries and headquartered in Dubai, Kuwait is our historical home and where we have our heart.
History aside, Kuwait is also one of the most promising markets in the region, given the amount of oil and gas projects, infrastructure upgrades and its strategic location. GAC’s strengths in servicing the oil and gas sector, large industrial projects, onshore and offshore drilling, pipe laying, etc. are well suited for the Kuwait market. We also have a strong HSSE (health, safety, security and environment) and compliance track record, which is paramount as we provide services to many oil and gas companies globally.
What are your key activities?
GAC Group is a global organisation with offices in every continent. Our biggest operation is in the Middle East, where we have more than 3,000 professionals providing shipping, logistics and marine services to our clients.
Our services extend across most parts of the oil and gas supply chain. In Kuwait, project logistics; air, sea and land freight; Customs clearance; and ship agency services make up our core operations. We also offer offshore support services with GAC’s fleet of about 30 anchor handling tugs and barges in the Gulf.
GAC Kuwait has also been the local agent for one of the world’s oldest and largest shipping companies since 1958 and has recently been nominated as agents for one of the shipping alliances.
How would you describe GAC’s market share in Kuwait?
We have a good market share in the oil and gas, energy and infrastructure sectors. This is a segment of the market where operations can be more complex, with many potential risks that must be identified, assessed and planned for.
The key to our continued success is our ability to identify efficient supply chain solutions for our clients. We always try to find the optimal balance between speed and costs while weighing the various potential risks. We are also able to capture a good market share across these sectors due to our strong HSSE and compliance focuses.
What differentiates GAC from its competitors?
GAC is one of the largest integrated providers of shipping, logistics and marine-related services on the planet, and this gives us a unique ability to create value and minimise risks for our clients.
Our integrated service offering – including project logistics, ship agency and freight services – and global logistics network can help increase operational efficiency. We know the Kuwaiti market well, have experienced staff and can mitigate the local and international risks to save costs for our clients.
GAC services many international oil and gas and EPC companies and we attribute this to our experienced specialists, constant striving to improve the service delivery and high HSSE and compliance standards. Some competitors can handle certain parts of the supply chain, but few can offer integrated and seamless operations like we do.
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